Money Management

It’s important to take action once a CD matures. Read on to see how to weigh your choices. [[{“value”:”

CDs are sort of like a revolving door. You open one and tie up your money for a period, but eventually, that money is yours to reclaim once your CD matures.

If you have a CD that just came due, you may be wondering what to do with the money. With CD rates being high right now, opening another CD may be tempting.

But should you commit to opening another CD? Or is there a better choice? Ask yourself these questions to find out.

1. Do I have a complete emergency fund outside of my CD?

Since life can be frustratingly expensive out of the blue, and you never know when a surprise home repair or medical bill might arise, it’s important to have a fully loaded emergency fund at all times. At a minimum, you should aim for three months of living expenses in savings, as that amount could get you through a period of unemployment.

Maybe you had a complete emergency fund before opening your last CD, only a few months ago, you had to take a withdrawal for a surprise expense. If so, you may want to put the money from your recently matured CD into a regular savings account.

2. Do I have any large expenses coming up?

Maybe you’ve been hoping to buy some new furniture or take a big trip to celebrate getting your master’s degree. Or maybe you’re expecting to have to replace your water heater in the coming months.

If you have a large expense coming up soon, whether for a happy reason or not, then you generally don’t want to commit your money to a CD. There can be costly penalties for cashing out a CD before it matures, so a savings account is a better place for money you might need within a year.

3. Am I trying to save for a goal that’s not too far away?

If you’re saving for a goal that’s pretty far out — say, 10 years away or more — then investing in stocks is generally a smarter move. While many CDs are paying around 5% today, the stock market’s average annual return over the past 50 years has been 10%.

This means that if you have $5,000 you’re investing for a milestone that’s 20 years away, putting it into stocks could grow that sum into about $33,600 (past results do not guarantee future returns). Even if you were to earn 5% in a CD every year for the next 20, that would only turn your $5,000 into about $13,300.

However, if you’re saving for a goal that’s a couple years away or a bit more, investing in stocks isn’t the best idea. You may not have enough time to ride out an extended stock market slump if you’re saving for a home renovation you want to do in three or four years.

In that case, a CD could be a great bet. But you may want to favor a longer-term CD, even if it means not getting the best rate available today.

The Federal Reserve is expected to start cutting interest rates at some point this year. Once that happens, CD rates are likely to fall. And while they may not fall so dramatically, if a 36-, 48-, or 60-month CD aligns with your timeline, you may want to choose a CD with one of these terms.

It’s important to think carefully about what you want to do with a CD that’s just matured. Consider all of these points when making your choice.

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A large credit card balance could wreak serious havoc on your finances. Read on to learn more about the consequences. [[{“value”:”

It’s natural to turn to credit cards every so often for unplanned expenses or larger purchases you can’t quite cover on the spot. But relying on credit cards too often could lead to a situation where your debt has gotten out of hand.

That’s the situation a lot of consumers are in today. Recent data from Experian finds that Gen Xers owe more money on their credit cards than any other generation, with an average balance of $9,123.

But what if you owe more than twice that much money on your cards? What if you’re $20,000 in the hole? If that’s the boat you’re in, two pretty unfortunate things could happen.

1. You might lose a boatload of money to interest

Credit card companies don’t extend lines of credit out of the goodness of their hearts. They do it to make money by collecting interest. And if you owe $20,000 on your cards, you may end up paying a lot of it, especially if your debt drags on for many years.

In fact, let’s say your credit card has a 20% APR. Here’s the amount of interest your $20,000 balance might cost you, depending on the number of years it takes you to pay that debt off.

2. Your credit score might take a serious beating

Your credit score tells lenders how much risk they’re taking on by loaning you money. The higher your score, the easier it becomes to borrow, and the more favorable an interest rate you might snag when you sign a loan.

But a large credit card balance relative to your total spending limit across your cards could cause your credit score to plummet thanks to a higher credit utilization ratio — even if you’re making your minimum payments on time every month. And once your credit score drops, you might struggle to be approved for new loans or credit cards. If you do get approved, you risk getting stuck with higher interest rates that make your debt very expensive.

How to shed a $20,000 credit card balance

If you’re sitting on a $20,000 credit card balance, you may be eager to whittle it down to $0 as quickly as you can. That’s not likely to happen within weeks, or even months. But there’s one tactic you can employ that might help — rolling your debt into a personal loan.

The nice thing about personal loans is that they come with fixed interest rates, so your monthly payments are nice and predictable. And chances are, you’ll be able to lock in a much lower interest rate on a personal loan than what your credit cards are charging you.

If you’re able to roll your credit card debt into a $20,000 personal loan with an 8% interest rate, even if it takes you five years to pay it off, you’re looking at spending $4,332 on interest. That’s much less than the $11,793 you might pay if you carry a $20,000 balance for five years at a 20% APR.

You can also look to pay off your personal loan ahead of schedule to minimize the amount of interest you’re charged. But to pull that off, you may need to make big changes to your spending, like move to a less expensive home or get rid of a car and stick with public transportation for a few years.

You could also look to join the gig economy and use all of your extra earnings to pay down your debt. Just be sure to reserve some of your side hustle income for taxes, in case you don’t have them withheld from the start.

A $20,000 credit card balance could hurt your finances and cause you a lot of stress otherwise. Paying it off as quickly and efficiently as possible could do you a lot of good.

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Put your money to work so it can grow the way you want it to. Read on to see which accounts are best suited to make that happen. [[{“value”:”

I know a lot of people these days who are barely managing to cover their expenses month after month. We can thank lingering inflation for that.

Hopefully, though, you’re in a different situation and you have some spare cash at your disposal. If so, it’s important to find the right home for it so it can grow nicely. Here are four options to consider right now.

1. A savings account

Building an emergency fund? Saving for a near-term goal, like a new phone or a vacation? If so, then a savings account is your best bet. It gives you access to your money without risking a penalty, and you can earn a nice amount of interest if you shop around for a great rate.

Of course, the one drawback with savings accounts is that your interest rate is subject to change. That’s something to definitely be mindful of right now.

Interest rates on savings accounts and CDs are up right now following a string of Federal Reserve rate hikes in 2022 and 2023. But the Fed is expected to start cutting rates this year. Once that happens, savings accounts are apt to start paying less. So the sooner you get some money into a savings account, the more time you’ll have to take advantage of today’s great rates while they’re still available.

2. A CD

A certificate of deposit (CD) is less flexible than a savings account because you’re required to keep your money in the bank for the duration of the CD term. And withdrawing your cash early could cause you to lose several months of interest as a penalty.

But the benefit of opening a CD is that your interest rate is guaranteed throughout its term. We just talked about the potential for rate cuts in 2024. If you open a 12-month CD now at 5%, you’re guaranteed to get that 5% through mid-2025. So if you’re saving for a specific goal that’s about a year out, you can confidently plan on getting $500 in interest to put toward it if you’re opening a $10,000 CD.

But make sure any money you put into a CD is money you won’t need before the CD matures. And if you recently had to tap your emergency fund, it pays to replenish that money before putting cash into a CD.

3. A brokerage account

Today’s CD rates are pretty impressive. You know what’s even more impressive? The stock market’s average annual return, which has been 10% over the past 50 years.

If you have money you’re saving for a far-off goal, like your toddler’s college education, then a brokerage account may be a far better bet than a CD because you have the potential to earn a lot more money. In fact, let’s say CD rates somehow hold steady so you’re able to score 5% over the next decade. If so, you’ll grow $10,000 into about $16,300.

With a brokerage account loaded with stocks, you might enjoy a 10% return on your $10,000 instead. That could leave you with about $26,000 in a decade’s time instead of $16,300.

4. An IRA

You could use a regular brokerage account to save for retirement. But it pays to use an individual retirement account (IRA) for the tax savings involved.

Money you contribute to an IRA is pre-tax up to the allowable IRS limit. This year, that limit is $7,000 if you’re under age 50, or $8,000 if you’re 50 or older. Not only might you snag a similar return in an IRA to what you get in a brokerage account but you can also lower your 2024 tax bill substantially in the process.

Let’s say you’re in the 22% tax bracket based on your income and put $5,000 into an IRA in 2024. That amounts to $1,110 in tax savings for the year.

Of course, one thing you should know about IRAs is that you’ll typically face a 10% early withdrawal penalty for taking out your money before reaching age 59 1/2. So if you want to invest with more flexibility, a brokerage account could be a better choice, even though you’ll lose the tax break involved.

You have plenty of great options for putting your money to work this month. Think about your goals and timeline when making your choice, as well as how much flexibility you need if you’re choosing between a savings account and a CD, or between a brokerage account and an IRA.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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One change on your part could leave you $550 richer after a year. Read on to learn how to make it happen. [[{“value”:”

I remember being so excited when my parents decided to get cable during my childhood. From that point on, it was bye bye, crappy reception. With cable, I could actually get a clear, crisp picture on my TV screen.

Oh, and the choices. Man, those were amazing. Forget network TV — I had Nickelodeon, baby. I would’ve watched that channel all night had my parents let me.

These days, cable is more of an ordinary expense for many people. But it can be an expensive one. And there can be many cheaper alternatives. So if you’re short on savings, you may want to consider downgrading your cable service — or even getting rid of it altogether.

Downgrading your cable plan could save you big money

U.S. News & World Report says that the average cost of basic cable service was $25.40 as of 2018, which was the last time the Federal Communications Commission put out data along these lines. The cost of expanded basic service, meanwhile, was $71.37 per month on average. That brings the difference between the cost of expanded cable service and basic cable to $45.97 per month, or roughly $550 a year.

Here’s why that’s so important: A 2023 SecureSave survey found that 63% of working Americans could not afford a $500 emergency expense. So if you’re able to downgrade from expanded cable to basic cable, you might manage to pocket $550 after a year. Put that money into a savings account, and you’ve got the starting point of a nice emergency fund.

Also, because these numbers are a bit dated, it’s fair to assume that downgrading your cable plan this year could result in even more monthly savings than $45.97. So if you’re not watching all of those channels, why keep paying for them?

Furthermore, if you don’t get much use out of cable, you may want to consider dumping it altogether and finding a streaming platform to use instead. As an example, you can pay just $6.99 per month for Netflix with ads, or $15.49 for ad-free content. That’s cheaper than cable, and if you don’t watch all that much TV, it could make more sense for your budget.

Take a close look at your spending on a whole

If you’re doing just fine financially — meaning, you’re meeting your savings goals and are paying your bills each month with ease — then there may not be a need to make any changes to your spending. But if that’s not the case, then it definitely pays to spend a little time doing a spending audit.

Comb through recent bank and credit card statements to see where your money’s been going lately. And then, assess each non-essential expense on its own to see if you should keep paying for it.

If you’re spending $42 per month on a gym and you go three times a week, don’t cancel. That sounds like you’re getting your money’s worth. But if you’re spending $15.49 on Netflix and you only watch it for an hour per month, you should probably cancel.

The reality is that money is tight for a lot of people these days. So if there are expenses you can cut back on without wrecking your quality of life, why not bank that money instead of spending it and getting little in return?

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

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Discover which states have the highest gas taxes and how it affects your wallet. Find out if your state makes the list. [[{“value”:”

If you’ve ever found yourself grumbling at the gas pump, you’re definitely not alone. The price you pay per gallon doesn’t just cover the cost of the fuel itself; a significant portion of it goes toward taxes. And depending on where you live, that tax can make a big difference in what you pay to fill up your tank.

Some states have much higher gas taxes than others, which can impact your personal finances. It affects everything from your daily commutes to the cost of road trips. Curious to know which states top the list? Buckle up as we tour the 10 states with the highest gas tax rates. You might be surprised by who’s leading the pack and how it affects your wallet.

1. Pennsylvania: $0.576 per gallon

Topping the list is Pennsylvania, where drivers pay an eye-popping $0.576 per gallon in gas taxes. But this hefty tax isn’t just lining pockets — it’s being put to work. The funds are crucial for maintaining and improving Pennsylvania’s extensive network of roads and bridges. With miles of rural highways and bustling urban streets to take care of, every penny counts.

2. California: $0.511 per gallon

Coming in second, California’s gas tax is $0.511 per gallon. Known for its iconic road trips and notorious traffic jams, the Golden State’s fuel tax is a hot topic among drivers. The high tax rate supports ambitious infrastructure projects and public transit systems aimed at keeping the state moving.

3. Washington: $0.494 per gallon

In Washington, drivers shell out $0.494 per gallon in gas taxes. This might seem steep, but it’s part of the state’s commitment to enhancing its transportation infrastructure and supporting environmental initiatives. The gas tax helps fund projects that improve roads, bridges, and even bike lanes, making travel safer and more efficient for everyone.

4. New Jersey: $0.423 per gallon

New Jersey imposes a gas tax of $0.423 per gallon and it’s only set to increase more. Despite being one of the smaller states, New Jersey’s strategic location means it sees a lot of traffic. The funds from the gas tax are vital for maintaining the state’s roadways and transit systems, whether you’re navigating the Garden State Parkway or commuting to New York City.

5. Illinois: $0.392 per gallon

Illinois drivers face a gas tax of $0.392 per gallon, and that’s going to increase soon to $0.470 per gallon. This might not be the highest on our list, but a significant amount still adds up, especially for those long Chicago commutes. The funds collected are crucial for addressing the state’s transportation needs, including road repairs and public transportation improvements.

6. Ohio: $0.385 per gallon

Ohio’s gas tax is set at $0.385 per gallon. This might seem like just another line on your receipt, but it plays a critical role in keeping the state’s extensive highway system in top shape. With numerous trucks and travelers passing through daily, these funds help ensure the roads remain safe and well-maintained.

7. North Carolina: $0.385 per gallon

In North Carolina, drivers also pay $0.385 per gallon in gas taxes. This tax might feel like a burden at the pump, but it’s crucial for the state’s efforts to improve its highways and accommodate a growing population. With more people moving to North Carolina and tourism on the rise, the demand on the roads is increasing.

8. Oregon: $0.380 per gallon

Oregon charges $0.380 per gallon in gas taxes. Known for its scenic routes and commitment to environmental sustainability, the state uses these funds to maintain its roads and promote eco-friendly transportation options. Plus, Oregon is investing in sustainable infrastructure, which benefits everyone in the long run.

9. West Virginia: $0.372 per gallon

West Virginia’s gas tax stands at $0.372 per gallon. This might not seem like much compared to other states, but every dollar is essential in the mountainous terrain of West Virginia. The revenue is crucial for maintaining the state’s road infrastructure and supporting local residents and the coal industry.

10. Utah: $0.345 per gallon

Rounding out our list is Utah, with a gas tax of $0.345 per gallon. While it’s the lowest on our list, it still significantly supports the state’s transportation network. Utah’s growing population and thriving tourism sector, especially around its stunning national parks, put a lot of pressure on the roads.

Save on auto insurance

While gas prices can be a significant expense for road trippers, especially in states with higher fuel costs, reducing your auto insurance expenses is another way to balance your transportation budget. Here are a few tips to save on auto insurance.

Regularly review your policy and assess your coverage needsMaintain a good driving recordUse telematics programsResearch available discountsIncrease your deductible

By employing these strategies, you can significantly reduce your auto insurance costs, helping mitigate the higher expenses from fuel and allowing you to enjoy your road trip without financial stress.

Gas taxes impact the cost of driving in each state. Understanding these taxes can help you better plan your budget, especially if you’re taking a road trip or considering a move. Stay informed and keep an eye on how these taxes evolve, as they directly affect your wallet every time you fill up your tank.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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The right moves could result in big savings at Costco. Read on to learn more. [[{“value”:”

I’m on a tighter budget these days thanks to persistently high inflation. Since I’m paying more for everything from clothing to groceries to utilities, I have to be careful with how I spend. And that extends to Costco, a store I shop at almost every week.

It’s true that buying products at Costco can be a money-saving endeavor by itself. But here are some specific ways you can save extra at Costco this month when you do your shopping.

1. Choose the Kirkland brand whenever possible

Kirkland is Costco’s signature brand, and you’ll find it on everything from clothing to baked goods. You may be someone who usually walks past the Kirkland products on the shelves in favor of brands you know or recognize. And I wouldn’t totally blame you, because I used to do that myself. But loading up on Kirkland products this month instead of your usual name brands could save you a lot of money.

During Costco’s most recent earnings call, CFO Gary Millerchip said, “We evaluate the potential for new high-quality Kirkland Signature items with a goal of providing at least 20% value versus what we would sell the national brand item as.”

In other words, if you buy the Kirkland version of a given item, you’re looking at saving 20% or more on its cost. I’d say that’s a pretty great deal.

Better yet, you don’t have to worry about getting stuck with a Kirkland purchase you aren’t happy with. Costco will take back just about any item for any reason (some exclusions apply to things like electronics). And if there’s something about a Kirkland product that doesn’t meet your needs or seems off (such as if you buy a food item and there’s an issue with its taste), you can generally get a full refund without a hassle.

2. Split bulk food purchases with friends or neighbors to avoid waste

Buying food from Costco in bulk can leave you paying less per ounce or unit. The problem, though, is that you risk letting some of your food spoil before you’ve gotten a chance to eat it — especially meats, dairy products, and produce items, all of which have a limited shelf life.

If you want to save more during your Costco shopping this month, make a plan to split perishable items with neighbors or friends ahead of time.

Just last week, I bought a massive container of strawberries for $2.79. My local supermarket had a container half that size for almost $4. However, there were a lot of strawberries, so I asked my neighbor if she wanted some for her kids. And OK, I didn’t ask for the $1.40 because we’re friends and my kids have raided her fridge to the tune of well more than $1.40 on numerous occasions.

The point, however, is that you can talk to friends and neighbors to see which items it makes sense to split down the middle. That way, you both save without risking food waste.

3. Do your shopping in person instead of online

The one thing that bugs me about Costco is that it’s always crowded. (And yes, I know to steer clear on weekends.) Because of this, I’m sometimes inclined to order from Costco.com instead of visiting the store.

But the reason I almost never order from the website is because there’s a markup on the site due to having the cost of shipping and handling built into each order. If you want to save money at Costco this month, resist the urge to shop online and head to the store. In my experience, in-store prices are easily 5% to 10% less compared to what I see online, though keep in mind that Costco’s prices vary by location.

One trick that usually works for me is getting to Costco a few minutes before it opens. In my area, Costco opens at 10:00 a.m., but I often show up at 9:50 a.m. and I’m still allowed in. This gives me a chance to get through some of my shopping before other customers even think to arrive.

Because it’s gotten so disgustingly expensive to exist, saving even just a few dollars this month could work wonders for your financial picture. These moves could save you big money at Costco when you add them all up, so it pays to incorporate them into your June shopping plans.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool has a disclosure policy.

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